Day: November 5, 2021

Alex and Bob are in partnership, sharing profits and losses equally.

Alex’s capital account is £6,000 and Bob’s capital account is £5,000. Goodwill is valued at £12,000, but is not shown in the accounts.

They agree to admit Lucy as a new partner and to share profits and losses equally.
What is Alex’s new capital account balance?

Select ONE answer:

1. £4,000
2. £8,000
3. £10,000
4. £12,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. 1.Correct ==> £6,000 + (£12,000 / 2) – (£12,000 / 3)
3. Not correct
4. Not correct

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